Australia a key target with a trillion dollars ready for investment in agribusiness globally

Date:05-26-2016

Global private equity companies have accrued about $1 trillion that they are ready and willing to invest in agribusiness, with Australia the key target.

Doug Rathbone, former CEO of crop protection company Nufarm turned winery investor, revealed the figure after meeting with key private equity firms in the United States.

"Right now the figures for private equity alone, which I've just seen in the US, is just over a trillion Australian dollars which has been raised and in their hands of 'dry powder' to invest," he said.
"That's the most that's ever been there in 10 years of private equity.

"Above that there's other fund managers, like West Chester, with $3 billion to invest in agriculture.

"The two funds I talk to are solely focused on countries with rules of law, with no risk of being nationalised, North America, US and Canada, New Zealand, Australia, United Kingdom.

"Brazil is somewhat attractive, and Argentine is being questioned."

Mr Rathbone said the money was ready for disruptive or innovative businesses.

Paine and Partners' investment in Costa, Australia's largest fruit producer, is an example of the investment that can be made.

After taking a 50 per cent stake in 2011, it helped float the business on the Australian Stock Exchange in 2015.

Now Paine and Partners retains a 12 per cent stake.

In December 2015, the company took a majority stake in bio-pesticide company AgBiTech to develop a natural virus that targets cotton bollworm.

"Typically the deals are specific, individual, with a lot of future value, often disrupters," Mr Rathbone said.

"They're looking for investments they can feel the confidence with their money and their expertise can grow the business."

Asked how Government walked the line between public opposition to foreign investment and the need to be open for business, Mr Rathbone recommended a clear distinction between ownership and investment.

"Investment is much easier, and can be done with cooperation with business or entrepreneurs," he said.

"Ownership has a need for a clear policy definition, as to what size of asset and nature of the asset can be owned.

"If it is owned, there can be rules around conduct."